In a statement Repsol said the block is 'situated in a zone with one of the largest reserves of oil in the world,' adding that the award of the block will allow it to 'consolidate its alliance with PDVSA.'

In March, Repsol said its joint venture with Petroleos de Venezuela (PDVSA) is expected to boost production in the country by 60 pct to about 160,000 barrels per day.

The company said its 49 pct controlled venture with PDVSA will give it exploration rights to the Mene Grande, Quiriquire and Quiamar-la Ceiba blocks where it already operates, as well as new neighbouring areas such as Barua-Motatan, Ceuta-Tomoporo and Orucual.

Repsol noted that the assignation of the Junin 7 block was announced together with that of 6 other blocks to a number of state-owned oil companies from other countries by Venezuelan president Hugo Chavez.

Venezuelan President Hugo Chavez said his government will cancel all mining licenses and stop issuing new ones to foreign companies.

Chavez's remark in a speech late Wednesday expanded on his past statements that the government would eliminate licenses, or concessions, on stalled mining projects or those that violate the law.

"I want to tell the country I've decided, after looking at this and that, to cancel all mining concessions. We're not giving more concessions to transnationals," he said. [Bold added]

Foreign companies, he said, tend to gain access to mines and leave them idle, while Venezuelans in nearby areas need jobs.

Chavez also spoke in general terms about the Las Cristinas gold mine, which Toronto-based Crystallex International Corp. has an operating contract to develop, without specifically addressing the government's plans for that mine.

"(Las Cristinas) is the eighth gold mine in the world, right here. And, well, that's a mess if a company from who-knows-where has the concession, then sold it to another. They sell it," Chavez said. "They go around the world saying they have this much in gold reserves, but they are never going to exploit it." [bold added]

Chavez said the aim "is to recover the national power, sovereignty to manage our own resources."

Chavez did not directly mention Crystallex in his comments. The company's president had issued a statement hours earlier saying plans were on track for the firm to develop the gold mine in eastern Venezuela.

Chavez said earlier this week the government is seeking to create a national mining company at Las Cristinas, and Crystallex president and CEO Todd Bruce said that does not change the status of the project.

The company has said previously it does not fall under a government review of concessions because it has an operating contract - not a concession - from state mining conglomerate Corporacion Venezolana de Guyana.

Chavez, an ally of Cuban President Fidel Castro, says he is leading Venezuela away from capitalism toward a new socialist system.

His government also has sought to create joint ventures with foreign oil companies to obtain a majority stake in managing oil fields where private oil companies used to pump oil independently under contract.